Roads & Transportation

One easy cut for the UK: a 17 bln stg train set

25 Aug 2010

A new railway linking England s two biggest cities sounds like an extravagance at the best of times. But when UK public spending needs drastic pruning, such a project is totally divorced from economic reality. The government should scrap it.

ACS sale of Abertis stake may only be a first step

11 Aug 2010

The Spanish construction group is raising around 2.4 bln euros by offloading part of its stake in the toll road operator to CVC. But it's far from clear what the buyout group gets out of the deal, other than a foot in the door. A bigger shakeup of Abertis still looks likely.

UK rail auction is just the ticket

3 Aug 2010

For sale: brand new railway taking 300 kph trains, plus iconic London terminus, opportunity to add international traffic, and with stateguaranteed, inflationproofed income. Serious offers over 1.4 billion pounds only. No wonder all the usual infrastructure suspects are keen.

Strong trade growth belies double dip talk

29 Jul 2010

The fear of a double dip in the global economy looks overdone. Global trade is probably back to its precrisis peak. China has kept motoring. German growth is rallying. America is picking up gradually. The world's problems are many but global recovery appears on track.

Dubai World offer puts restructuring deal in sight

20 May 2010

The troubled holding firm has revised its $23.5 bln debt plan. Dubai isn't putting in more money, but will allow lenders to choose security today or cash later. With holders of 60 pct of bank debt on board, Dubai is close to the threshold it needs to force through the deal.

Blackstone shows restraint with Travelport IPO

2 Feb 2010

The airline reservation group's IPO will raise about $1.78 bln to pay off debt. Private equity owned firms have a poor stock market record. But the valuation looks undemanding. And with other IPOs in the pipeline, Blackstone has good reasons to make sure Travelport takes off.

Buffett changes habits for railway deal

4 Nov 2009

To buy Burlington Northern, he is paying a full price, issuing precious Berkshire Hathaway stock, and splitting each of the company s baby B shares into 50 pieces, taking their price down from $3,000plus into the doubledigit realm of normal stocks. Whatever next a dividend?

What does Buffett see in railways?

3 Nov 2009

He s paying a big premium to swallow Burlington Northern Santa Fe, a US railroad operator. It s not necessarily a signal to buy the sector in a hurry. But the Berkshire Hathaway chairman does seem to think rail transport could be building a bit of a head of steam.

Buffett’s $34bn buy is barely a bargain

3 Nov 2009

The US value investor has a name for buying dollar bills for 50 cents. His deal to buy the Burlington Northern railway group doesn t appear to fall into that category. True, Buffett is going big in a company and industry he likes. But it is a bet on growth rather than on value.

Ferrovial’s loss on Gatwick is price of past excess

21 Oct 2009

The Spanish construction group will take a E142m hit selling the London airport to infrastructure rival GIP at below regulated asset value. The deal is the cost of Ferrovial being allowed to keep flagship airport Heathrow. And it's a reminder of the crazy prices paid in the boom.

National Express right to travel alone

2 Sep 2009

The struggling UK train and bus operator turned down what looked like a juicy offer from private equity, preferring to press ahead with a discounted rights issue. For this troubled company, the board s decision might look barmy. But rejecting the conditional offer was prudent.

Ferrovial still on better side of improved Cintra deal

31 Jul 2009

The Spanish infrastructure group is absorbing Cintra, its 68%owned motorway subsidiary, on terms that are better for minority investors than had been expected. The merger has some logic. But Cintra needs the deal less than its parent. The minorities will have to lump it.

Rail woes give UK chance to rethink privatisation

29 Jul 2009

The crisis hasn t done any favours to the old private good, government bad thinking. The return of one big privatised rail franchise to the UK government provides a good opportunity for a privatestate comparison. Who knows, the Tories might end up the party of nationalisation.

Tui problems bigger than Hapag-Lloyd financing

28 Jul 2009

The German group s 43%owned shipping unit is set for a E330m liquidity injection. But Tui itself generates little cash and may be in a precarious position. With Hapag in serious trouble, Tui is relying heavily on its travel subsidiary for cash to repay its debts.

UK’s off-balance-sheet liabilities crash home

2 Jul 2009

The government has renationalised a failing rail franchise, sold in a flawed auction, while delaying the partprivatisation of the useless postal service. Both moves reflect current economic reality and past bad policy. The pressure on public finances is only going to intensify.

UK sticks to one sound principle in LDV rescue

6 May 2009

The government will lend £5m to the Deripaskacontrolled ailing vanmaker. The state support means taxpayers may well end up owning a bunch of trucks. But at least the UK s statebacked banks weren t coerced into helping against their better judgment. That s a good precedent.

TCI retreat hands win to critics of activists

28 Apr 2009

The hedge fund fought hard and scrappily to get on the board of CSX, the US railway group. Now a weakened TCI has bailed. Such outcomes boost those who criticise activists as shortterm profitseekers. Unfortunately, they also risk silencing legitimate shareholder concerns.

Deripaska makes himself hostage to fortune

23 Feb 2009

The Russian oligarch says he s not worried about his home country s refusal to help Rusal, the cornerstone of his empire, with its $14bn debt burden. But a vanmaker under his control is looking for a mere $45m of UK state aid. Deripaska s optimism is hard to fathom.

Harley fills up the tank with pricey Buffett fuel

3 Feb 2009

The billionaire has added the motorcycle maker to Berkshire s shelf of iconic American brands. He s buying half of Harley s $600m unsecured debt offering. But rather than Buffett handing over a trophy price, Harley is paying the premium for his vote of confidence.

Trash deal shows market’s cleansing power

14 Jul 2008

Garbagecollector Republic Services launched a bid for Allied Waste that shareholders thought reeked. Now Republic is on the receiving end of a $6bn takeover from trash king Waste Management. It just goes to show markets work even when managers stink.